Nonprofit organizations play an essential role in supporting millions of New Yorkers, ensuring they have shelter, food, safety, and various forms of assistance. These organizations provide services such as aiding domestic violence survivors, representing families facing eviction, running after-school programs, and delivering meals. They serve as the backbone of community support. Despite their crucial role, New York State frequently fails to pay these nonprofits promptly for contracted services.
Payment delays for nonprofits are not uncommon, often extending for months or even years. State agencies might issue “stop-the-clock” notices over minor issues, causing work to commence well before any payment is received. Unlike state bodies, nonprofits can’t easily absorb such delays. They may resort to taking high-interest loans, depleting reserves, reducing staff, or cutting services, all while fulfilling their contractual obligations.
The impact of these delays is significant and immediate.
In a recent crisis, nonprofit service providers faced a stark reality that highlighted the precarious nature of their operations. The Office of Victim Services awarded contracts to organizations assisting vulnerable New Yorkers, such as domestic violence and sexual assault survivors. Despite the governor’s public praise for the initiative, these organizations began their work immediately, hiring staff and expanding services, even as they anticipated delays in official contracting. However, the state unexpectedly revoked the contracts, throwing the entire sector into disarray overnight.
Efforts are now underway to mitigate the immediate repercussions by extending contracts, but significant damage has already been done. This incident added to already delayed payments, highlighting a crucial point: if nonprofits received timely and consistent payments, they would be more resilient against sudden disruptions, like the federal contract cancellations witnessed over the past year. Instead, ongoing delays leave these organizations in a precarious position, vulnerable to sudden policy shifts.
This situation is not due to nonprofit mismanagement. Rather, it is the state transferring the financial burden of its delays and policy reversals onto the organizations responsible for delivering public services. This effectively acts as an unseen and unjust tax on the safety net provided by nonprofits. A recent community survey revealed that the state owes New York nonprofits at least $650 million in funding that has already been allocated through the budget process.
Last year, the Legislature unanimously passed legislation (S.7001/A.7616) that included long-overdue reforms to the contracting process. The bill would have standardized contracting rules across agencies, required clear written directives when services must begin before contracts are executed, mandated advances so nonprofits are not forced to front costs, and required interest payments that reflect real borrowing costs. These are not radical demands; they are basic, good-government practices that align state expectations with state behavior.
Gov. Hochul vetoed the bill despite its unanimous bipartisan support, leaving in place a contracting system she herself acknowledges is broken. She did not deny the harm — she promised instead to fix it administratively. That promise carries real weight, because the crisis facing nonprofits is accelerating. Federal cuts and threats to core programs are driving up demand, a slowing economy is drying up charitable dollars, and two out of three New York nonprofits now fear they cannot fund basic operations next year.
In this context, a veto without immediate, concrete solutions is not just disappointing — it is destabilizing. Thousands of community-based organizations have been left in limbo. They, and the New Yorkers they serve, need her to swiftly make good on her promise. They are looking to her to implement real, workable solutions that will end chronic delays, create transparent and uniform contracting rules, ensure timely advances, and stop forcing nonprofits to bankroll the state.
Nonprofits do not need another study or task force. They need a functional system that pays them on time for the services New York relies on them to deliver. They need the state to act with the same urgency they bring to preventing evictions, protecting survivors, feeding families, and weatherizing homes in the dead of winter.
The governor committed to fixing this system. In her upcoming state of the state address, we look to see her plan to do so. Nonprofits — and the millions of New Yorkers who depend on them — cannot wait.
Brown is the president and CEO of Empire Justice Center in Albany. She is also president of the board of directors for the New York Legal Services Coalition.
